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Johns Hopkins University
Department of Economics
Monetary Analysis
Fall 2012
Take-Home Final Exam
This exam consists of four questions worth a total of 100
points. It is due in Mergenthaler 466 by 5:00 PM on
December 21. You can use the textbook and your

Public limited companies: theory questions
Question 1
Explain clearly what is meant by the following terms:
a)
b)
c)
d)
Board of Directors
Annual General Meeting
Nominal Capital
Issued Capital.
Question 2
Which of the following statements apply to ordinar

Partnership: exercises
Exercise 7
S Desai and K Das are in partnership and their partnership deed states that:
interest of 6% per annum is allowed on capital
K Das will have a salary of 4,200
remaining profit and losses will be shared 2:1 in favour of S D

Example 3
J Robbins and M West started in partnership on 1 January and contributed capitals of
18,000 and 12,000 respectively. The following conditions are stated in the partnership
agreement:
partnership salary:
M West 5,000
interest on capital:
5% pa
pr

Exercise 12
Bob and Andy Gilmour are in partnership as glaziers and their partnership deed states the following:
Andy will have a partnership salary of 7,200 per annum
interest on capital will be allowed at 7% per annum
profits and losses will be shared 3

Loan capital
Debentures
The company receives the money as a loan.
A certificate is given to acknowledge the loan and shows its value.
Usually they relate to a fixed period and have a fixed repayment date but
they can be sold on the stock exchange if the h

Exercise E2
Lauren and Emma White are in partnership and their partnership agreement states that:
Emma will receive a partnership salary of 3,000
interest on capital is allowed at 6% per annum
profits and losses are shared 3:2 in favour of Lauren.
The fol

TYPES OF BUSINESS ORGANISATION: A COMPARISON
SOLE TRADER
FINANCE
SETTING UP
OWNERSHIP
MANAGEMENT AND
CONTROL
LIABILITY
PARTNERSHIP
PUBLIC LIMITED COMPANY
Capital privately raised
Capital privately raised
Shares issued to public Debentures and
loans
Loans,

Partnership: extension exercises
Exercise E1
J Brown and G Black are in partnership and have provided the following information.
The partnership deed states that:
G Black will receive a salary of 4,500
interest on capital is allowed at 5% per annum
Profit

Exercise 10
Roy and Fiona Jenkins are in partnership as gardeners and share profits/losses equally. Interest on
capital is allowed at 6% per annum. Roy has a salary of 8,000 per annum.
The following balances have been taken from the partnership ledger aft

Example 1
R Peters and K Smith set up in partnership on 1 January with capitals of 12,000 and
10,000. They share profits and losses equally.
Net profit for the year ended 31 December amounted to 20,000.
You are required to prepare the following:
profit an

Current account
A sole traders capital account is credited with net profit (or debited with net loss) and debited with
drawings. The final balance shows what the business owes the owner.
In a partnership a current account is opened for each partner and re

Notes
1. Stock at 31 December was valued at 11,320.
2. At 31 December :
rent and ratesprepaid: 860
heat and light owing: 720.
3. Provide for depreciation using the straight line method as follows:
delivery vans: 25%
equipment: 20%
You are required to

Notes
1. Stock at 30 June was valued at 26,500.
2. Depreciation on the straight line is as follows:
vehicles: 25%
furniture and fittings: 15%.
3. At 30 June
salaries owing: 4,362
insurance prepaid: 657.
4. Create a provision for doubtful debts at 5% o

Partnership accounts: exercises
Exercise 1
J Manson and S Morrison are in partnership with capitals of 8,000 and 5,000 respectively. The
partnership deed states that:
interest of 5% per annum is allowed on capital
remaining profits and losses are to be sh

Exercise 3
L Andrews and S Edwards formed a partnership on 1 May with capitals of 20,000 and 15,000
respectively. The partnership deed states that:
L Andrews is to receive a partnership salary of 2,500
interest of 5% per annum is allowed on capital
profit

Exercise 11
D MacKenzie and A McLeod are in partnership in a pottery and their partnership deed states that:
D MacKenzie will receive an annual partnership salary of 8,200
interest on capital will be allowed at the rate of 5% per annum
profits and losses

Partnership: final accounts
At the end of the year when the final accounts are being prepared the trading and profit and loss
account is the same as that of a sole trader. However, as the net profit has to be divided among the
partners an extra section is

Example 6
S Short and B Menzies are in partnership. Their partnership deed states that:
interest of 4% per annum is allowed on capital
a salary of 5,000 per annum is to be allowed to Menzies
remaining profits and losses are to be shared 2:1 in favour of S

Public limited companies: accounts
The day-to-day accounts of plcs are similar to those of the sole trader and a partnership. The
straightforward Capital and Current Accounts will be replaced by detailed records of shares and
debentures. There will be a r

Exercise 5
Thomson and Steven are in partnership and the following information is available.
Thomson
Steven
Capital account balances at start
60,000
40,000
Current account balances at start
4,200 (Cr)
3,500 (Cr)
5,000
3,000
Drawings for the year ended 31

Example Year 2
From the following information relating to ABC plc prepare the Appropriation section of the Profit and
Loss Account for the year ended 31 December Year 2.
Share capital:
50,000 6% preference shares of 1 each
600,000 ordinary shares of 1 e

Share capital: tasks
Task 1
Use the information below and the worksheet provided to carry out the following tasks:
calculate the total preference dividend payable
calculate how much profit is available for the ordinary shareholders
calculate the percentag